Antitrust Commission Recommends Repeal of Robinson-Patman Act

December 2007

Over the last three years, the Antitrust Modernization Commission (“Commission”) has undertaken a comprehensive review of U.S. antitrust laws and the policies and practices of the Department of Justice’s Antitrust Division and Federal Trade Commission in implementing those laws. In concluding its work, the Commission sent its Report and Recommendations to the President and Congress. The members of the Commission were appointed by the President and the respective majority and minority Leadership of the House of Representatives and Senate with the goal of ensuring fair and equitable representation of various points of view in the Commission. The Commission members were aided by many hours of hearings as well as input from academia and the public.

One subject studied by the Commission was the Robinson-Patman Act (“RPA”), the Federal price discrimination law enacted 1936. The Report recommends the repeal of the RPA, with the Commission stating:

“The Commission recommends that Congress finally repeal the Robinson-Patman Act (RPA). This law, enacted in 1936, appears antithetical to core antitrust principles. Its repeal or substantial overhaul has been recommended in three prior reports, in 1955, 1969 and 1977. That is because the RPA protects competitors over competition and punishes the very price discounting and innovation in distribution methods that the antitrust laws otherwise encourage. At the same time, it is not clear that the RPA actually effectively protects the small business constituents that it was meant to benefit. Continued existence of the RPA also makes it difficult for the United States to advocate against the adoption and use of similar laws against U.S. companies operating in other jurisdictions. Small business is adequately protected from truly anticompetitive behavior by application of the Sherman Act.”

The Report notes that civil enforcement of the RPA recently has been mostly unsuccessful. Specifically, the Federal Trade Commission has issued only one RPA complaint since 1992; and of 200 reported cases by private parties with RPA claims filed in Federal court in the last 10 years only 3 jury verdicts in favor of plaintiffs were affirmed on appeal, and one of those was reversed by the U.S. Supreme Court.